Cromwell European Real Estate Investment Trust (“CEREIT”) has acquired three offices in Poland for €69.38 million. The properties will be managed by CEREIT’s sponsor, Cromwell Property Group, through its integrated European investment asset management platform.
Cromwell European Real Estate Investment Trust (“CEREIT”) has acquired three offices in Poland for €69.38 million (comprising the purchase consideration for the properties of €68.81 million and professional and other fees and expenses of €0.57 million). The three office properties represent 4.0% of CEREIT’s portfolio as of 14 February 2019. The properties will be managed by CEREIT’s sponsor, Cromwell Property Group, through its integrated European investment asset management platform1.
With a total lettable area of 34,496 sqm, two properties are located close to the central business district in Warsaw and the other is in Gdansk, one of the largest urban centres in Poland.
Riverside is a multi-let office property in Warsaw, let to 16 tenants including RMF FM, Interia, Tchibo, FlixBus and Travelist. Grojecka 5 is also an office building in Warsaw, let to 16 tenants including PKO BP Group and icon.
In Gdansk, the Arkonska Business Park is an office building let to nine tenants, including Bank Zachodni WBK, Assa Abloy Mercor and C-Map Poland.
Karol Pilniewicz, Head of CEE at Cromwell Property Group in Europe, commented: “Our team in Poland has a long track record of acquiring and managing investment opportunities like this portfolio of three offices in Poland.
“GDP in Poland grew by 4.6% last year, significantly outperforming the average Eurozone rate of 2.5%. With a healthy labour market and low unemployment driving domestic demand for office property, we’re seeing some interesting investment opportunities emerging in the major urban centres like Warsaw or Prague.”
CEREIT is a real estate investment trust with a portfolio of 97 properties used primarily for office, light industrial / logistics, and retail purposes, in Denmark, Finland, France, Germany, Italy, the Netherlands, as well as Poland. CEREIT’s portfolio has an aggregate lettable area of approximately 1.4 million sqm and has an appraised value of approximately €1,795 million as at 14 February 2019.
Jeremy Carey, James Verstringhe, Tavistock
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Cromwell Property Group is a real estate investor and manager operating on three continents with a global investor base. As at 31 December 2018, Cromwell Property Group has €7.3 billion of total assets under management across Australia, New Zealand and Europe. Cromwell offers a global full-service investment management platform with fully integrated real estate capabilities and hands-on asset management.
Across Europe, Cromwell manages €3.7 billion of real estate assets and investment capacity across its funds and mandates, encompassing approximately 220 assets and 3,000 tenants. Cromwell’s strength lies in its local real estate expertise drawn from 200+ people in 20 offices across 12 European countries.
Cromwell European REIT is a real estate investment trust (“REIT”) with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate assets in Europe that are used primarily for office2, light industrial / logistics2, and retail purposes3. With a portfolio of 97 properties in or close to major gateway cities in Denmark, Finland, France, Germany, Italy, the Netherlands, as well as Poland, and a balanced focus on the office2 and light industrial / logistics2 sectors, it is also the first REIT with a diversified Pan-European portfolio to be listed on Singapore Exchange Securities Trading Limited.
CEREIT’s portfolio has an aggregate lettable area of approximately 1.4 million sqm with over 900 tenants and a WALE4 profile of around 4.6 years. Comprising primarily freehold or ongoing leasehold5 assets, the portfolio has an appraised value of approximately €1,795 million as at 14 February 20196.
CEREIT is managed by Cromwell EREIT Management Pte. Ltd., a wholly-owned subsidiary of CEREIT’s sponsor, Cromwell Property Group7, a real estate investor and manager with operations in
1 This is pursuant to a master property and portfolio management agreement entered into among the trustee of CEREIT, the manager of CEREIT and Cromwell Europe Limited (a wholly-owned subsidiary of Cromwell Property Group) at IPO dated 22 November 2017.
2 “Office” properties refer to real estate that are predominantly used for office purposes, whether in existence by themselves as a whole or as part of larger mixed-use developments and “light industrial / logistics” properties refer to real estate that are predominantly used for light industrial, warehouse, and logistics purposes, the majority of which may have an attached office component.
3 “Retail” properties refer to real estate that are predominantly used for retail purposes.
4 “WALE” is defined as weighted average lease expiry by headline rent based on the final termination date of the agreement (assuming the tenant does not terminate the lease on any of the permissible break date(s), if applicable).
5 Classified as Continuing Leasehold or Perpetual Leasehold. A Continuing Leasehold is agreed in principle for an indefinite period of time but has a fixed ground rent paid to the land owner which must be re-agreed at the end of a certain period, which may result in a termination if the leaseholder and the land owner do not agree on the new ground rent. A Perpetual Leasehold is for an indefinite period of time and the ground rent has been paid off perpetually (which type of leasehold is most similar to a freehold situation).
6 Valuation as at 31 December 2018 for the IPO portfolio and the property in Ivrea, Italy. For the 22 newly acquired properties, valuation dates are as follows: 27 September 2018 for the new properties in the Netherlands, Finland and Poland; 30 September 2018 for the new properties in Italy; and 19 October 2018 for the new properties in France.
7 Comprising Cromwell Corporation Limited and the Cromwell Diversified Property Trust (the responsible entity of which is Cromwell Property Securities Limited).